RENDS Seasonally Change from Contribution to Index ...next few months, up 2 points from December....

SMALL BUSINESS OPTIMISM INDEX COMPONENTS

Index ComponentSeasonally

Adjusted LevelChange from Last Month

Contribution to Index Change

Plans to Increase Employment 20% 0 0%Plans to Make Capital Outlays 29% 2 7%Plans to Increase Inventories 3% 4 18%Expect Economy to Improve 41% 4 18%Expect Real Sales Higher 25% -3 -13%Current Inventory -5% -3 -13%Current Job Openings 34% 3 13%Expected Credit Conditions -4% 0 0%Now a Good Time to Expand 32% 5 22%Earnings Trends -4% 11 48%Total Change 23 100%(Column 1 is the current reading; column 2 is the change from the prior month; column 3 the percent of the total change accounted for by each component; * is under 1 percent and not a meaningful calculation)

1201 “F” Street NW

Suite 200W

ashington, DC

20004 nfib.com

Based on a Survey of Small and Independent Business Owners

NFIB SMALL BUSINESS

ECONOMIC TRENDS NFIB SMALL BUSINESS

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William C. DunkelbergHolly Wade

SBET_CVR_2012.indd 1-2SBET_CVR_2012.indd 1-2 3/30/2012 11:27:49 AM3/30/2012 11:27:49 AM

January 2018

NFIB SMALL BUSINESS

ECONOMIC TRENDS

_____________________NFIB Research Center has collected SmallBusiness Economic Trends Data with Quarterlysurveys since 1973 and monthly surveys since1986. The sample is drawn from the membershipfiles of the National Federation of IndependentBusiness (NFIB). Each was mailed a questionnaireand one reminder. Subscriptions for twelvemonthly SBET issues are $250. Historical andunadjusted data are available, along with a copyof the questionnaire, from the NFIB ResearchCenter. You may reproduce Small BusinessEconomic Trends items if you cite the publicationname and date and note it is a copyright of theNFIB Research Center. © NFIB Research Center.ISBS #0940791-24-2. Chief Economist William C.Dunkelberg and Director, Research and PolicyAnalysis Holly Wade are responsible for thereport.

IN THIS ISSUE

_____________________Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Commentary. . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Optimism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 10

Credit Conditions . . . . . . . . . . . . . . . . . . . . . . . 12

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Capital Outlays. . . . . . . . . . . . . . . . . . . . . . . . . 16

Most Important Problem . . . . . . . . . . . . . . . . .18

Survey Profile . . . . . . . . . . . . . . . . . . . . . . . . . 19

Economic Survey. . . . . . . . . . . . . . . . . . . . . . . 20

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SUMMARYOPTIMISM INDEXThe Index of Small Business Optimism gained 2.0 points in January, rising to 106.9, again one of the strongest readings in the 45-year history of the NFIB surveys. The highest reading of 108.0 was reached in July 1983 and the lowest reading of 79.7 occurred in April 1980. Six of the 10 Index components posted a gain, two declined, and two were unchanged. The gain left the Index historically strong and maintained a string of exceptional readings that started the day after the 2016 election results were announced. A year after the election-induced surge in Optimism, small-business owners remain confident about the future.

LABOR MARKETSJob creation was solid in the small-business sector as owners reported a seasonally adjusted average employment change per firm of 0.23 workers, a strong showing. The lack of “qualified” workers is impeding growth in employment. Thirteen percent (unchanged) reported increasing employment an average of 2.4 workers per firm and 9 percent (down 1 point) reported reducing employment an average of 3.4 workers per firm (seasonally adjusted). Fifty-five percent reported hiring or trying to hire (down 4 points), but 49 percent (89 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill. Twenty-two percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (up 3 points), exceeding the percentage citing taxes or the cost of regulation as their top business problem. Thirty-four percent of all owners reported job openings they could not fill in the current period, up 3 points from December. Twelve percent reported using temporary workers, unchanged. A seasonally adjusted net 20 percent plan to create new jobs, unchanged from December and at record high levels. Labor markets have become very tight, for both skilled and unskilled workers.

CAPITAL SPENDINGSixty-one percent reported capital outlays, unchanged from December and one of the highest readings in this recovery to date. This anticipates a substantial increase in capital spending. Of those making expenditures, 44 percent reported spending on new equipment (up 1 point), 28 percent acquired vehicles (up 5 points), and 16 percent improved or expanded facilities (unchanged). Six percent acquired new buildings or land for expansion (unchanged) and 13 percent spent money for new fixtures and furniture (down 2 points). Twenty-nine percent plan capital outlays in the next few months, up 2 points from December. Improvements in productivity depend crucially on investment spending in the labor intensive small-business sector. Improved earnings trends and lower taxes increase the pool of capital available for firms to invest in their businesses. Many of these investments do not involve “high” or new technology, just improvements in standard equipment and processes.

This survey was conducted in January 2018. A sample of 10,000 small-business owners/members was drawn.One thousand six hundred and fifty-eight (1,658) usable responses were received – a response rate of 17 percent.

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SALES AND INVENTORIESThe net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past three months compared to the prior three months was a net 5 percent, a 4 point decline following a 14 point improvement in December. The net percent of owners expecting higher real sales volumes fell 3 points, falling to a net 25 percent of owners, still one of the best readings since 2007.

The net percent of owners reporting inventory increases rose 6 percentage points to a net 4 percent (seasonally adjusted). The net percent of owners viewing current inventory stocks as “too low” was a net negative 5 percent, 3 points lower than December. Apparently the buildup of inventories left stocks a bit larger than owners wanted, based on expected sales volumes. However, the net percent of owners planning to add to inventory rose 4 points from December to a net 3 percent. Plans averaged 4 percent in the last six months of 2017 as firms geared up for a solid holiday season.

INFLATIONThe net percent of owners raising average selling prices rose 3 points to a net 11 percent seasonally adjusted, the highest reading since July 2014. Unadjusted, 9 percent of owners reported reducing their average selling prices in the past three months (down 2 points), and 19 percent reported price increases (up 4 points). Seasonally adjusted, a net 23 percent plan price hikes (up 1 point), although far fewer will report actually doing so in the following months. There is a strong dynamic in price adjustments on Main Street that is typical of a less regulated market.

COMPENSATION AND EARNINGSReports of higher worker compensation rose 4 percentage points to a net 31 percent, the highest reading since 2000 and among the highest in survey history. Twenty-two percent (up 3 points) selected “finding qualified labor” as their top business problem, the highest reading since 2000, the peak of the last expansion. Plans to raise compensation rose 1 point in frequency to a net 24 percent in response to tighter labor markets, the highest reading since 1989. Small firms are raising compensation to attract and keep the employees they need. The frequency of reports of positive profit trends improved a huge 11 points to a net negative 4 percent reporting quarter on quarter profit improvements, the best reading since March of 1988.

CREDIT MARKETSThree percent of owners reported that all their borrowing needs were not satisfied, unchanged and historically low. Thirty-one percent reported all credit needs met (down 1 point) and 52 percent said they were not interested in a loan, unchanged. Only 2 percent reported that financing was their top business problem. Three percent reported loans “harder to get’, unchanged and at historic lows. Thirty-one percent of all owners reported borrowing on a regular basis (down 3 points). The average rate paid on short maturity loans was down 20 basis points at 5.9 percent. If the Federal Reserve raises rates the anticipated three times this year, variable rate loan costs will respond immediately, although longer term rates are not likely to reflect the full hike.

SUMMARY

COMMENTARY

The new tax law, the Tax Cuts and Jobs Act, produced the most recent boost to small business optimism. And federal government related cost pressures continue to abate, offering a more supportive business climate for small firms. Consumer spending remains supportive, and business spending and housing remain strong.

On the Federal Reserve front, the minutes of their last meeting revealed a discussion of inflation that mirrored much of the recent public discussion by Former Chair Yellen, who acknowledged the difficulties the committee has in understanding current inflation dynamics and why inflation continues to remain below target, despite very accommodative policies. It is worrisome that our central bank wants to create inflation and assumes that once it has “enough”, it can keep inflation from going higher. The Federal Reserve’s forecast is that inflation will continue to rise and then stop at their target of 2 percent, they offer no explanation of why or how it will stop. And, there is no rigorous explanation of why 2 percent is the “right’ level for the economy. If it is not, pursing policies that try to increase inflation could become even more damaging to the economy, hurting the small business sector. In the meantime, the Federal Reserve will continue to raise rates.

The U.S. ranked second in the World Economic Forum (Davos)’s assessment of global competitiveness. Strong points included inflation, venture capital, business sophistication, innovation, financial market development, labor market efficiency, and higher education and training. Not so good U.S. ranking included 61st (out of 137 economies studied) on business costs of crime and violence, 57th on organized crime, 39th for internet use penetration and 95th on tax rate as a percent of profits (pre tax law). The extensive size and performance of our small business sector plays a key role in supporting these rankings and now government policies are more focused on strengthening the competitiveness and performance of this sector by reducing regulatory and tax restrictions that waste time and capital. The new tax law is one more significant step towards establishing a pro-growth environment supporting the small business sector.

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OVERVIEW - SMALL BUSINESS OPTIMISM

OPTIMISM INDEXBased on Ten Survey Indicators

(Seasonally Adjusted 1986=100)

OPTIMISM INDEXBased on Ten Survey Indicators

(Seasonally Adjusted 1986=100)

OUTLOOKGood Time to Expand and Expected General Business Conditions

January Quarter 1974 to January Quarter 2018

(Seasonally Adjusted)

SMALL BUSINESS OUTLOOK

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2013 88.8 90.9 90.0 91.7 94.0 94.0 94.4 94.0 93.8 91.5 92.2 93.8

2014 94.0 91.6 94.0 94.8 96.2 95.4 96.0 95.9 95.3 96.0 97.8 100.3

2015 97.7 98.1 95.7 96.5 97.9 94.6 95.7 95.7 96.0 96.0 94.5 95.2

2016 93.9 93.0 92.6 93.6 93.8 94.5 94.6 94.4 94.1 94.9 98.4 105.8

2017 105.9 105.3 104.7 104.5 104.5 103.6 105.2 105.3 103.0 103.8 107.5 104.9

2018 106.9

70

80

90

100

110

75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17

Ind

ex V

alu

e (1986=100)

YEAR

-40

-20

0

20

40

60

80

0

10

20

30

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Perc

en

t "G

oo

d T

ime to

Exp

an

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(th

ick li

ne)

Perc

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Min

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Exp

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en

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Bu

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on

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ns (th

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YEAR

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SMALL BUSINESS OUTLOOK (CONTINUED)

OUTLOOK FOR EXPANSIONPercent Next Three Months “Good Time to Expand”


MOST IMPORTANT REASON FOR EXPANSION OUTLOOKReason Percent by Expansion Outlook

January 2018

OUTLOOK FOR GENERAL BUSINESS CONDITIONSNet Percent (“Better” Minus “Worse”) Six Months From Now


Reason Good Time Not Good Time Uncertain

Economic Conditions 20 8 9

Sales Prospects 4 4 7

Fin. & Interest Rates 0 1 1

Cost of Expansion 0 5 10

Political Climate 6 3 10

Other/Not Available 1 4 6


2013 -30 -25 -23 -14 -6 -3 -5 -4 -12 -19 -23 -12

2014 -11 -16 -13 -8 -1 -9 -5 -5 -4 -5 10 12

2015 0 2 -2 -5 -4 -8 -3 -8 -6 -6 -10 -15

2016 -21 -21 -17 -18 -13 -9 -5 -12 0 -7 12 50

2017 48 47 46 38 39 33 37 37 31 32 48 37

2018 41


2013 6 5 5 5 8 8 9 7 7 6 9 9

2014 8 6 9 9 10 8 10 10 12 11 11 15

2015 13 13 11 11 14 10 12 11 11 13 12 8

2016 10 8 6 8 9 8 8 9 7 9 11 23

2017 25 22 22 24 23 21 23 27 17 23 27 27

2018 32

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SMALL BUSINESS EARNINGS

EARNINGSActual Last Three Months



ACTUAL EARNINGS CHANGESNet Percent (“Higher” Minus “Lower”) Last Three Months

Compared to Prior Three Months (Seasonally Adjusted)

MOST IMPORTANT REASON FOR LOWER EARNINGSPercent Reason

January 2018

* Increased costs include labor, materials, finance, taxes, and regulatory costs.

-50

-40

-30

-20

-10

0

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Net P

erc

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t

YEAR

Reason Current Month One Year Ago Two Years Ago

Sales Volume 9 12 13

Increased Costs* 6 8 9

Cut Selling Prices 3 2 4

Usual Seasonal Change 7 8 8

Other 3 4 4


2013 -24 -25 -22 -24 -24 -23 -22 -22 -23 -25 -24 -21

2014 -25 -26 -23 -21 -19 -18 -18 -18 -19 -22 -17 -14

2015 -17 -18 -21 -17 -9 -17 -19 -16 -13 -18 -19 -17

2016 -18 -21 -22 -19 -20 -20 -21 -23 -20 -21 -20 -14

2017 -12 -13 -9 -9 -10 -10 -10 -11 -11 -14 -12 -15

2018 -4

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SMALL BUSINESS SALES

SALES EXPECTATIONSNet Percent (“Higher” Minus “Lower”) During Next Three Months


ACTUAL SALES CHANGESNet Percent (“Higher” Minus “Lower”) Last Three Months

Compared to Prior Three Months(Seasonally Adjusted)

SALESActual (Prior Three Months) and Expected (Subsequent Three Months)

January 1974 to January 2018 (Seasonally Adjusted)


2013 -3 0 -3 3 8 6 8 6 9 4 3 7

2014 13 2 13 9 15 12 11 7 6 11 14 19

2015 14 14 14 9 7 5 7 8 2 6 -1 7

2016 3 0 1 1 1 2 1 -1 4 1 11 31

2017 29 26 18 20 22 17 22 27 15 21 34 28

2018 25

-40

-30

-20

-10

0

10

20

30

40

50

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Expected

Actual

Net P

erc

en

t

YEAR


2013 -8 -7 -7 -6 -6 -8 -7 -7 -6 -7 -7 -8

2014 -9 -6 -6 -4 -3 -2 -3 -3 -4 -2 -3 2

2015 -2 -4 -3 -6 5 -6 -6 -4 -1 -7 -4 -5

2016 -7 -6 -8 -6 -8 -4 -8 -9 -6 -7 -8 -7

2017 -2 2 5 5 5 -4 0 3 1 1 -5 9

2018 5

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SMALL BUSINESS PRICES

PRICE PLANSNet Percent (“Higher” Minus “Lower”) in the Next Three Months


ACTUAL PRICE CHANGESNet Percent (“Higher” Minus “Lower”)

Compared to Three Months Ago(Seasonally Adjusted)

PRICESActual Last Three Months and Planned Next Three Months




2013 5 5 -1 2 0 5 2 2 1 4 3 2

2014 5 4 9 11 10 11 12 6 4 7 5 7

2015 6 3 2 1 4 2 3 1 1 1 4 -1

2016 -4 -4 -4 -1 1 2 -2 3 -1 2 5 6

2017 5 6 5 7 7 1 8 9 6 8 10 8

2018 11


2013 21 22 17 17 15 18 15 18 20 19 20 19

2014 19 22 19 21 21 21 22 19 17 21 20 22

2015 19 18 15 16 17 18 17 15 14 15 18 20

2016 16 14 17 16 16 16 14 15 18 15 19 24

2017 21 20 20 18 21 19 23 20 19 22 23 22

2018 23

-30

-20

-10

0

10

20

30

40

50

60

70

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Actual

Planned

Net P

erc

en

t

YEAR

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SMALL BUSINESS EMPLOYMENT

ACTUAL EMPLOYMENT CHANGESNet Percent (“Increase” Minus “Decrease”) in the Last Three Months


QUALIFIED APPLICANTS FOR JOB OPENINGSPercent Few or No Qualified Applicants

EMPLOYMENTPlanned Next Three Months and Current Job Openings




2013 2 -3 1 2 -1 1 -3 0 0 1 1 2

2014 2 2 2 2 1 1 1 0 3 1 1 7

2015 5 4 2 2 4 0 0 6 5 0 0 -1

2016 1 -3 0 -1 -1 -2 -2 -3 3 0 -2 4

2017 3 4 3 4 5 -1 2 2 -1 3 2 3

2018 4

-10

0

10

20

30

40

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Planned

Job Openings

YEAR

Perc

en

t


2013 34 34 36 38 38 41 40 42 41 40 44 38

2014 38 40 41 41 46 43 42 46 42 45 45 43

2015 42 47 42 44 47 44 48 48 45 48 47 48

2016 45 42 41 46 48 48 46 48 48 48 51 44

2017 47 44 45 48 51 46 52 52 49 52 44 54

2018 499

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Rep

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SMALL BUSINESS EMPLOYMENT (CONTINUED)

JOB OPENINGSPercent With Positions Not Able to Fill Right Now


HIRING PLANSNet Percent (“Increase” Minus “Decrease”) in the Next Three Months


SMALL BUSINESS COMPENSATION

COMPENSATIONActual Last Three Months and Planned Next Three Months

January 1986 to January 2018 (Seasonally Adjusted)

-5

0

5

10

15

20

25

30

35

40

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Net P

erc

en

t

YEAR

Planned Higher

Actual Higher


2013 18 21 18 18 19 19 20 18 20 21 24 23

2014 22 22 22 24 24 26 24 25 21 24 25 25

2015 26 29 24 27 29 24 25 28 27 27 28 28

2016 29 28 25 29 27 29 26 30 24 28 31 29

2017 31 32 30 33 34 30 35 31 30 35 30 31

2018 34


2013 2 4 2 6 6 7 9 8 9 5 9 8

2014 11 7 7 8 11 12 13 8 9 10 11 15

2015 13 12 12 11 13 9 12 11 12 11 11 15

2016 11 10 9 11 12 11 12 9 10 10 15 16

2017 18 15 16 16 18 15 19 18 19 18 24 20

2018 20

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SMALL BUSINESS COMPENSATION (CONTINUED)

ACTUAL COMPENSATION CHANGESNet Percent (“Increase” Minus “Decrease”) During Last Three Months


COMPENSATION PLANSNet Percent (“Increase” Minus “Decrease”) in the Next Three Months


PRICES AND LABOR COMPENSATIONNet Percent Price Increase and Net Percent Compensation Increase


0

5

10

15

20

25

30

35

40

-30

-20

-10

0

10

20

30

40

50

60

70

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 1420162018

Pri

ces (T

hic

k Lin

e)

Lab

or C

om

pen

sati

on (T

hin

Lin

e)

YEAR


2013 8 8 9 9 9 7 11 11 13 10 13 14

2014 12 14 14 14 15 14 14 14 15 13 14 18

2015 13 14 13 14 14 12 15 12 16 17 19 21

2016 15 12 16 15 15 14 15 14 14 19 15 20

2017 18 17 18 18 18 18 16 15 18 21 17 23

2018 24


2013 13 14 16 15 16 14 14 15 17 17 15 18

2014 19 19 23 20 20 21 21 22 18 20 22 24

2015 25 20 22 23 25 21 23 23 23 22 24 22

2016 27 22 22 24 26 22 24 24 22 25 21 26

2017 30 26 28 26 28 24 27 28 25 27 27 27

2018 31

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SMALL BUSINESS CREDIT CONDITIONS

CREDIT CONDITIONSLoan Availability Compared to Three Months Ago*


* For the population borrowing at least once every three months.

REGULAR BORROWERSPercent Borrowing at Least Once Every Three Months

AVAILABILITY OF LOANSNet Percent (“Easier” Minus “Harder”)

Compared to Three Months Ago(Regular Borrowers)


2013 31 29 30 31 29 29 31 28 30 28 29 30

2014 31 30 31 30 31 28 30 29 31 28 33 31

2015 33 30 32 30 29 31 30 33 29 28 27 31

2016 33 31 32 29 29 29 28 29 32 28 31 30

2017 30 31 30 31 28 27 30 31 29 30 30 34

2018 31


2013 -7 -7 -4 -7 -5 -6 -6 -6 -5 -6 -6 -7

2014 -6 -8 -8 -5 -6 -6 -5 -5 -7 -4 -5 -3

2015 -4 -3 -5 -4 -3 -4 -4 -4 -4 -3 -4 -5

2016 -5 -5 -5 -5 -4 -5 -4 -4 -5 -4 -4 -6

2017 -5 -4 -3 -4 -3 -3 -3 -3 -6 -4 -4 -3

2018 -3

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-32

-28

-24

-20

-16

-12

-8

-4

0

4

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Net P

erc

en

t

YEAR

SMALL BUSINESS CREDIT CONDITIONS (CONTINUED)

BORROWING NEEDS SATISFIEDPercent of All Businesses Last Three Months Satisfied/

Percent of All Businesses Last Three Months Not Satisfied(All Borrowers)

EXPECTED CREDIT CONDITIONSNet Percent (“Easier” Minus “Harder”) During Next Three Months

(Regular Borrowers)

INTEREST RATESRelative Rates and Actual Rates Last Three Months



2013 -9 -8 -6 -8 -6 -7 -8 -8 -7 -8 -7 -7

2014 -7 -7 -7 -6 -7 -7 -5 -5 -7 -5 -6 -5

2015 -5 -4 -6 -4 -4 -4 -5 -7 -6 -5 -4 -6

2016 -7 -7 -6 -6 -6 -6 -5 -5 -7 -6 -5 -6

2017 -3 -3 -3 -4 -4 -3 -4 -3 -4 -5 -4 -4

2018 -4


2013 31/6 29/7 29/7 31/6 28/5 29/5 30/5 31/5 28/6 28/6 32/4 32/4

2014 31/5 29/5 30/5 30/5 30/5 27/6 30/6 28/4 28/6 29/4 29/4 32/4

2015 32/4 33/3 35/5 31/4 30/4 32/5 32/4 33/3 30/2 30/3 32/3 32/4

2016 35/3 31/4 31/5 31/4 31/4 32/5 30/3 29/4 32/6 29/4 30/4 29/4

2017 31/4 30/3 32/4 32/3 31/3 27/4 31/3 34/3 33/2 29/4 32/4 32/3

2018 31/3

5

10

15

20

-40

-30

-20

-10

0

10

20

30

40

50

74 80 86 92 98 04 10 16

YEAR

Rela

tive (

thic

k lin

e)

Actu

al (t

hin

lin

e)

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SMALL BUSINESS CREDIT CONDITIONS (CONTINUED)

RELATIVE INTEREST RATE PAID BY REGULAR BORROWERS*

Net Percent (“Higher” Minus “Lower”) Compared to Three Months Ago

*Borrowing at Least Once Every Three Months.

ACTUAL INTEREST RATE PAID ON SHORT-TERM LOANS BY BORROWERS

Average Interest Rate Paid

SMALL BUSINESS INVENTORIES

INVENTORIESActual (Last Three Months) and Planned (Next Three Months)




2013 5.5 5.3 5.4 5.6 5.7 5.2 5.6 5.4 5.8 5.4 5.4 5.6

2014 5.6 5.4 5.3 5.4 5.7 5.7 5.4 5.3 5.4 5.5 5.6 5.1

2015 5.3 5.1 5.7 5.0 4.8 5.0 5.2 5.4 4.8 5.1 4.7 5.0

2016 5.4 5.3 5.2 5.7 5.3 5.7 5.3 5.2 6.2 5.2 5.6 5.5

2017 5.7 5.4 5.4 5.4 5.9 5.6 5.9 5.5 5.6 6.0 5.7 6.1

2018 5.9

-30

-25

-20

-15

-10

-5

0

5

10

15

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Actual

Planned

Net P

erc

en

t

YEAR


2013 -1 0 0 0 0 0 2 3 4 2 2 3

2014 4 3 2 2 2 2 1 2 3 0 0 -1

2015 2 0 1 1 1 2 1 2 -1 2 0 2

2016 7 6 6 4 4 4 2 2 3 1 2 4

2017 11 9 9 11 11 8 11 8 10 8 9 8

2018 12

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SMALL BUSINESS INVENTORIES (CONTINUED)

ACTUAL INVENTORY CHANGESNet Percent (“Increase” Minus “Decrease”) During Last Three Months


INVENTORY SATISFACTIONNet Percent (“Too Low” Minus “Too Large”) at Present Time


INVENTORY PLANSNet Percent (“Increase” Minus “Decrease”) in the Next Three to Six Months



2013 -7 -10 -7 -6 -6 -7 -9 -6 -7 -6 -8 -3

2014 -4 -3 -7 -6 -3 -4 -2 -3 -7 -1 1 1

2015 2 1 -5 -1 -4 0 2 -2 0 -2 -4 0

2016 -2 -3 -3 -5 -6 -6 -5 0 -4 -3 -3 3

2017 3 1 0 -1 -1 -3 1 1 -2 0 -2 -2

2018 4


2013 -6 -1 -5 -1 2 -1 -1 -1 -2 -1 -1 -2

2014 -2 -5 1 2 0 -1 0 2 2 3 1 6

2015 3 5 1 3 3 -4 0 2 3 0 -1 1

2016 -1 -1 -2 0 -1 -3 0 1 -7 2 4 4

2017 2 3 2 3 1 4 5 2 7 4 7 -1

2018 3


2013 -1 1 -3 -2 1 -2 -1 0 0 -5 -3 -4

2014 -2 -5 -2 -2 -3 -2 -3 -2 0 -3 -2 -2

2015 -1 -3 -7 -2 -1 -4 -6 -6 -5 -4 -5 -4

2016 -2 -2 -5 -5 -4 -4 -4 -2 -7 -4 -4 -3

2017 -5 -2 -5 -3 -6 -3 -2 -5 -3 -5 -2 -2

2018 -515

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SMALL BUSINESS CAPITAL OUTLAYS

CAPITAL EXPENDITURESActual Last Six Months and Planned Next Three Months



ACTUAL CAPITAL EXPENDITURESPercent Making a Capital Expenditure During the Last Six Months

INVENTORY SATISFACTION AND INVENTORY PLANSNet Percent (“Too Low” Minus “Too Large”) at Present Time

Net Percent Planning to Add Inventories in the Next Three to Six Months(Seasonally Adjusted)

-15

-10

-5

0

5

10

15

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Satisfaction

Inventory Plans

Perc

en

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YEAR

0

20

40

60

80

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Perc

en

t

YEAR

Actual

Expected


2013 55 56 57 56 57 56 54 53 55 57 55 64

2014 59 57 56 57 55 54 55 58 56 56 57 60

2015 59 60 58 60 54 58 61 58 58 58 62 62

2016 61 58 59 60 58 57 59 57 55 57 55 63

2017 59 62 64 59 62 57 57 60 59 59 59 61

2018 61

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SMALL BUSINESS CAPITAL OUTLAYS (CONTINUED)

AMOUNT OF CAPITAL EXPENDITURES MADEPercent Distribution of Per Firm Expenditures

During the Last Six Months

CAPITAL EXPENDITURE PLANSPercent Planning a Capital Expenditure During Next Three to Six Months

TYPE OF CAPITAL EXPENDITURES MADEPercent Purchasing or Leasing During Last Six Months

Amount Current One Year Ago Two Years Ago

$1 to $999 3 3 3

$1,000 to $4,999 8 7 8

$5,000 to $9,999 5 6 6

$10,000 to $49,999 20 18 21

$50,000 to $99,999 11 11 9

$100,000 + 15 14 14

No Answer 0 0 0

Type Current One Year Ago Two Years Ago

Vehicles 28 28 27

Equipment 44 42 43

Furniture or Fixtures 13 13 13

Add. Bldgs. or Land 6 6 5

Improved Bldgs. or Land 16 16 15


2013 20 24 23 22 23 24 25 26 27 24 24 25

2014 23 24 22 24 24 23 25 29 24 27 25 28

2015 25 25 22 25 25 24 26 26 27 27 25 25

2016 25 23 25 25 23 26 25 28 27 27 24 29

2017 27 26 29 27 28 30 28 32 27 27 26 27

2018 29

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SINGLE MOST IMPORTANT PROBLEM

SINGLE MOST IMPORTANT PROBLEMJanuary 2018

SELECTED SINGLE MOST IMPORTANT PROBLEMInsurance, Big Business Competition, Inflation, and Regulation


SELECTED SINGLE MOST IMPORTANT PROBLEMSales, Fin. & Interest Rates, Labor Cost, Labor Quality, and Taxes


Problem Current

One

Year Ago

Survey

High

Survey

Low

Taxes 19 21 32 8

Inflation 1 2 41 0

Poor Sales 9 10 33 2

Fin. & Interest Rates 2 2 37 2

Cost of Labor 6 7 9 2

Govt. Reqs. & Red Tape 16 19 27 4

Comp. From Large Bus. 9 8 14 4

Quality of Labor 22 15 23 3

Cost/Avail. of Insurance 10 8 29 4

Other 6 8 31 2

0

10

20

30

40

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Big Business Insurance

Inflation Regulation

Perc

en

t o

f Fir

ms

YEAR

0

10

20

30

40

74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

Taxes Sales

Interest Rates Labor Quality

Perc

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f Fir

ms

YEAR

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SURVEY PROFILE

OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY NFIB

Actual Number of Firms

NFIB OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY

Industry of Small Business

NFIB OWNER/MEMBERS PARTICIPATING IN ECONOMIC SURVEY

Number of Full and Part-Time Employees

0

5

10

15

20

25

Perc

en

t


2013 2033 870 759 1873 715 662 1615 782 773 1940 762 635

2014 1864 792 685 1699 678 672 1645 598 608 1502 615 568

2015 1663 716 575 1500 616 620 1495 656 556 1411 601 509

2016 1438 756 727 1644 700 735 1703 730 723 1702 724 619

2017 1873 764 704 1618 699 624 1533 713 629 1513 544 495

2018 1658

0

5

10

15

20

25

30

Perc

en

t

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NFIB RESEARCH CENTER SMALL

BUSINESS ECONOMIC SURVEY

SMALL BUSINESS SURVEY QUESTIONS PAGE IN REPORT

Do you think the next three months will be a good time

for small business to expand substantially? Why? . . . . . . . . . . . . . . . 4

About the economy in general, do you think that six

months from now general business conditions will be

better than they are now, about the same, or worse? . . . . . . . . . . . . 5

Were your net earnings or “income” (after taxes) from your

business during the last calendar quarter higher, lower, or

about the same as they were for the quarter before?. . . . . . . . . . . . . 6

If higher or lower, what is the most important reason?. . . . . . . . . . . . 6

During the last calendar quarter, was your dollar sales

volume higher, lower, or about the same as it was for

the quarter before?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Overall, what do you expect to happen to real volume

(number of units) of goods and/or services that you will

sell during the next three months?. . . . . . . . . . . . . . . . . . . . . . . . . 7

How are your average selling prices compared to

three months ago?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

In the next three months, do you plan to change the

average selling prices of your goods and/or services? . . . . . . . . . . . . 8

During the last three months, did the total number of employees

in your firm increase, decrease, or stay about the same?. . . . . . . . . . 9

If you have filled or attempted to fill any job openings

in the past three months, how many qualified applicants

were there for the position(s)?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Do you have any job openings that you are not able

to fill right now?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

In the next three months, do you expect to increase or

decrease the total number of people working for you? . . . . . . . . . . . 10

Over the past three months, did you change the average

employee compensation?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Do you plan to change average employee compensation

during the next three months?. . . . . . . . . . . . . . . . . . . . . . . . . . . 11

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SMALL BUSINESS SURVEY QUESTIONS PAGE IN REPORT

Are…loans easier or harder to get than they were

three months ago? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

During the last three months, was your firm able to

satisfy its borrowing needs? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Do you expect to find it easier or harder to obtain your

required financing during the next three months? . . . . . . . . . . . . . 13

If you borrow money regularly (at least once every three

months) as part of your business activity, how does the

rate of interest payable on your most recent loan compare

with that paid three months ago? . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

If you borrowed within the last three months for business

purposes, and the loan maturity (pay back period) was 1

year or less, what interest rate did you pay? . . . . . . . . . . . . . . . . . . 14

During the last three months, did you increase or decrease

your inventories? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

At the present time, do you feel your inventories are too

large, about right, or inadequate? . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Looking ahead to the next three months to six months,

do you expect, on balance, to add to your inventories,

keep them about the same, or decrease them? . . . . . . . . . . . . . . . 15

During the last six months, has your firm made any capital

expenditures to improve or purchase equipment, buildings,

or land? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

If [your firm made any capital expenditures], what was

the total cost of all these projects? . . . . . . . . . . . . . . . . . . . . . . . . 17

Looking ahead to the next three to six months, do you

expect to make any capital expenditures for plant

and/or physical equipment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

What is the single most important problem facing your

business today? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Please classify your major business activity, using one

of the categories of example below . . . . . . . . . . . . . . . . . . . . . . . . 19

How many employees do you have full and part-time,

including yourself? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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RENDS Seasonally Change from Contribution to Index ...next few months, up 2 points from December....

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